University of Twente Student Theses

Standardization and localization of HRM in Western MNCs in Iran

For 30 years, all the information the world had about Iran has been limited to Media broadcasts of the government’s policies of Iran. After Islamic revolution (1979) Iran has been isolated from international environment. Therefore, literature regarding the Iranian organizations and HRM in Iran are found hardly. This research tries to provide some information about implementing HRM in Western MNCs in Iran and difficulties they have, by formulating a question below:
‘How do Western MNCs deal with standardization and localization of HRM in Iran MNCs? And why?’
The theory demonstrates HRM is context specific and it is influenced by both macro and micro variables. Hence, HRM policies and practices can be localized, integrated or standardized when they are transferred by a multinational company to its subsidiaries in other countries due to macro and micro variables. In this research, the national context of Iran such as culture, economy, demography and policy are presented to illustrate how national factors, as macro variables, could affect implementation of HRM in MNCs Iran. Aside from macro variables, some organizational variables like head quarter control and equity ownership of the parent company are effective micro variables in determining the mode of HRM in MNCs. It is concluded based on the theories that each HRM practice in MNCs Iran possibly has one of the three modes of localization, integration and standardization.
To answer the question above, Unilever was used as a single case study. The researcher had semi-structured interviews with HR director and HR vice president of Unilever Benelux in the Netherlands and also HR director, HR specialist, Supply chain supervisor and demand planning manager in Unilever Iran to compare the information whether Unilever Iran implements the same HRM practices. The researcher just considered four HRM practices of recruitment, training, performance appraisal and compensation system. In addition, the researcher conducted an interview with the HR vice president of Unilever (Turkey, Iran and Central Asia) to find out what challenges they face in implementing standard HRM in Iran and how they bring out solutions.
The result illustrates that each HRM practice differs in the mode of standardization and localizations. Also, Each HRM practice is divided to other practices or elements. Each of these elements in Unilever Iran is considered due to being standard, localized or integrated. The research shows that most of these elements are standardized and integrated, which states that Unilever was successful in applying the constant structure among its subsidiaries. In other words, Unilever Iran applies the standard macro policies of HRM, but they use integrated approach in practices. Moreover, the results express that Unilever has some difficulties due to sanctions and some policies that mainly relate to the government and its policies directly and directly. Also, they have a few problems with people’s mindset towards promotion, payment and training in Unilever Iran which can be traced back to traditional background of people.
Considering standardization and localization of HRM in Iran highlights the significant role of computer and Intranet in HRM. Iran is sanctioned by U.S; therefore many computer programs may not be used. Thus, the researcher recommends applying the role of technology as one of the main factors of standardization and localization of HRM for further research. Moreover, the researcher could just consider one Western multinational company which is not sufficient for evaluating HRM standardization and localization in case of a country like Iran. As a result, it is suggested to conduct more research in MNCs Iran and also other companies in Iran to bring out more complete description of HRM circumstance in Iran